Solving transmission expansion planning by using the traditional model has some drawbacks as follows: 1. The problem is considered deterministically, which is not appropriate. Market mechanism and uncertainty in the deregulated environment should be taken into account and the probabilistic or risk-based approach should be applied. 2. Considering reliability criterion only under the normal condition is not enough. Inclusion of facility availabilities will make the problem more realistic. 3. Because many participants are affected by the transmission expansion, the objective of this problem must be modified. The expansion that provides the best advantage (socalled social welfare) for all participants should be selected. The proposedmethod can be mainly classified in two groups: (i) mathematical optimization algorithms, (ii) heuristic algorithms. Mathematical optimization method is to formulate the problem of transmission network using mathematical model, such as linear programming [4, 5] and Benders decomposition approach [6]. Recently, many heuristic algorithms, etc. simulated annealing (SA) [7], genetic algorithms (GA) [8, 9], tabu search (TS) [10], ant colony algorithm [11], have been applied to the TNEP problem. These algorithms are usually robust and generate near-optimal solutions for large complex networks. The combined use of optimization and heuristics algorithm has also been tried in [12]. The authors in [13] have investigated the method of SA, GA, TS, and then a hybrid approach based on TS algorithm is MATHEMATICAL MODEL OF TNEP (Transmission Network Expansion Plan) The AC power flow equation of power system [1] is: Where Pi is the input real power flow at bus i, Vi and Vi are the voltages at bus i and j, respectively. Gi j is the susceptance and Bi j is the conductance. di j is the voltage phase angle between i and j. Considering the characteristics of high voltage network, the above AC power equation could be simplified. 1) As the resistance of transmission circuits is significantly less than the reactance, it is reasonable to approximate G=0. 2) As the voltage phase angle difference is very small, it is reasonable to approximate sindi j= di j. 3) In the per-unit system, the numerical values of voltage magnitudes are very close to 1. Given the discussed practical approximations, the power flow in the transmission system can be approximated to the following equation. Analysis and computation of the DC power flow model are very convenient. The calculated amount is much less, and the speed could accelerate much more. In the TNEP problem, as the raw data itself are notaccurate, the precision of DC power model could meet the demand, though it is not so much accuracy as AC power model. In the following, the static TNEP problem is formulated as a mixed integer nonlinear programming model, and the power network is represented by a DC power flow model ………………………….3 ………………………….4 ………………………….5 ………………………….6 …………………………..7 …………………………..8 where, ci j is Cost of the addition of a circuit in branch i-j. xi j is Number of new circuits added in branch i-j. x0i j is Number of circuits in branch i-j in the initial case. xi j is Maximum number of new circuits added in branch i-j. Pi j is Power flow in branch i-j. Pi j is Maximum power flow of a circuit in branch i-j. Pgi is Generated power by units at bus i. Pdi is Demand power of loads at bus i. bi j is Susceptance of a circuit in branch i-j. di is Voltage phase angle at bus i. W is Set of all candidate circuits. Substitution in the above 6 for Pi j given by 5 yields In the above programming model; Eq. 3 is the objective function representing the investment costs of new transmission facilities. Eq. 4 models the power network by Kirchoff’s Laws (KCL and KVL). Eq. 5 is DC power flow equation. Eq. 4 and 5 is the constraints that power flow must satisfy. Eq. 6 is the constraint of maximal transmission power in the branch. Eq. 7 is the constraint of the output power of a generator. Eq. 8 is the maximal number of new circuits in a branch that can be added. There are two unknown variables xi j and di multiplying in 5, so it’s a nonlinear constraint. Considering variable xi j is integer, therefore, the whole is a hybrid nonlinear integer programming model. Transmission System Operator (TSO). Under this model, TSO is a single buyer who purchases energy from GENCOs and sell it to DISCOs. Assume that there is no direct contract between GENCO and DISCO. All transactions must be cleared in the spot market. The social welfare is calculated from the summation of participant welfares subtract the expansion cost as shown in (1). ………………1 where Here SW is the social welfare, GW1, CWj and TOW are the welfares of i-th GENCO, j-th DISCO and TSO, respectively. INV is the transmission expansion cost, N and M are the numbers of GENCOs and DISCOs. GRVy, GBC, and GTUC, are the revenue, bid (supply function) and transmission usage charge of i-th GENCO. CUj, CTCj,CTUCj and CTUCj are the bid (demand function), cost of energy, outage cost and transmission usage charge of j-th DISCO. TORV and TOTC are the revenue and cost of TSO, respectively. After substituting (2)-(6) for (1), social welfare can be rewritten as: It should be noted that social welfare in case where TRANSCO and TSO have been separated can be derived by using the similar way. It also provides the same result. where gi and Ij are the schedule outputs of i-th GENCO andjth DISCO in the spot market. gimin, gimax, 'jmin, 'jmax are the lower and upper limits of i-th GENCO and j-th DISCO, respectively. LFq is the line flow in q-th transmission line, LFqmax is the capacity of q-th transmission line, Q is the number of transmission lines. However, when there is unavailability of generation and/or transmission facility, the redispatch process will be conducted to maintain system security. The redispatch process is the optimization problem which determines the amount of power of generator to be changed and the amount of load to be curtailed. Detail of redispatch can be found in Appendix. In the redispatch process, constraint (9) must be modified to (13). Moreover, the additional constraints in (14) and (15) must be included. 13 14 15 Here gi and Ij are the original schedule outputs of i-th GENCO and j-th DISCO, Ag, and EENSj are the amount of power of i-th GENCO to be changed and expected energy not supplied of load ofj-th DISCO due to facility unavailability. If there is only inelastic demand, DISCO demand function can be neglected. Hence, the objective function is changed to 16 17 It should be noted that the formulation is represented on hour-based. This is because hour-based is the most basic phase and it can be extended to cover a long-term transmission expansion planning without difficulty. III. METHODOLOGY A. Assumption In this paper, we have some assumptions as follows: 1. Only one transmission expansion project is considered. 2. The transmission expansion cost (INV) varies proportionally to the capacity and length of the transmission line. 3. The DC power flow method is employed and the spot market is cleared by using the nodal price mechanism. B. Uncertainty The uncertainties which are considered are as follows: 1. Uncertainty in generation-load pattern 2. Uncertainty in bidding strategy of market participant 3. Availability of generation and transmission facilities Generation investment and load growth can be predicted based on many factors such as geography, resource and government policy. Because usually, there are not so much possible generation-load patterns (capacity and position), this uncertainty is handled by a set of generation-load patterns with their probabilities. The bidding strategy of participant in the spot market is modeled based on the real behavior in New England [4]. According to the historical data, GENCO bid can be divided into two parts. In the first part, GENCO bids based on the real marginal cost of his/her units. Usually, this strategy is applied from 0 MW to about 80% of capacity. In the second part, GENCO bids extremely high for the rest of capacity. Bidding strategy can be showed as in Fig. 2. Slopes ml and m2 present the strategy of the first and second parts, respectively. The uncertainty in GENCO bidding strategy is handled by using Monte Carlo simulation. For each scenario, ml and m2 are generated randomly using Weibul and Normal distributions as shown in (18) and (19), respectively. 18 19 Availability of generation and transmission is handled by using Monte Carlo simulation. These availabilities are randomly generated based on their availability data. C. Optimal Transmission Plan Determination A combined approach between analytical method and Monte Carlo simulation is proposed to solve transmission expansion planning problem. The calculation procedure can be described step by step as follows: 1. Start from the first generation-load pattern p = 1 2. Obtain generation, load and transmission line data 3. Set Monte Carlo simulation scenario k= 1 4. The bidding strategies of GENCO and DISCO are randomly generated. 5. Spot market is cleared, and the nodal price (NPpk), scheduled output of generation (gipk) and load (4jpk) are determined. 6. Generation and transmission facilities' availabilities are randomly generated. 7. If some of generation and/or transmission facilities are unavailable, the redispatch process is applied in order to determine the amount of power of generator to be changed (A gipk) and the amount of load to be curtailed (EENSjpk). 8. Compute SWpk using equation (8) 9. Repeat from step 3 to step 8 until the predefined number of scenarios (K) is reached. Then, compute SWp and NPp from the average value of SWpk and NPpkof all scenarios. 10. Repeat step 1 until the number of generation-load patterns (P) is reached. Social welfare and nodal price before expansion (SWo and NPo) are computed by using (20) and (21). 20